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Ibn Khaldun: Studies on His Contribution in Economy

In the following section, we focus on Ibn Khaldun's contribution to economic thought. We publish contributions by recognized scholars who endeavoured recently to give Ibn Khaldun long overdue credit by placing him properly within the history of economic thought.

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"When civilization [population] increases, the available labor again increases. In turn, luxury again increases in correspondence with the increasing profit, and the customs and needs of luxury increase. Crafts are created to obtain luxury products. The value realized from them increases, and, as a result, profits are again multiplied in the town. Production there is thriving even more than before. And so it goes with the second and third increase. All the additional labour serves luxury and wealth, in contrast to the original labor that served the necessity of life".

In these words Ibn Khaldun (1332-1406 CE) addressed the issue of economic growth in his influential book Al-Muqaddima (The Introduction [to history]). Ibn Khaldun's reflection on the economy, the sociology, and the material aspects of human civilisation is well known to scholars, but was, until recently, long forgotten in the history of economic thought. The originality of his contribution is nowadays appreciated by all the experts of Islamic studies and those who reconstructed the pre-modern history of social sciences.

As Ibrahim M. Oweiss says in his essay Ibn Khaldun the Father of Economics, Ibn Khaldun "laid down the foundations of different fields of knowledge, in particular the science of civilization (al-'umran). His significant contributions to economics, however, should place him in the history of economic thought as a major forerunner, if not the "father," of economics, a title which has been given to Adam Smith, whose great works were published some three hundred and seventy years after Ibn Khaldun's death. Not only did Ibn Khaldun plant the germinating seeds of classical economics, whether in production, supply, or cost, but he also pioneered in consumption, demand, and utility, the cornerstones of modern economic theory.

"Before Ibn Khaldun, Plato and his contemporary Xenophon presented, probably for the first time in writing, a crude account of the specialization and division of labour. On a non-theoretical level, the ancient Egyptians used the techniques of specialization, particularly in the era of the eighteenth dynasty, in order to save time and to produce more work per hour. Following Plato, Aristotle proposed a definition of economics and considered the use of money in his analysis of exchange. His example of the use of a shoe for wear and for its use in exchange was later presented by Adam Smith as the value in use and the value in exchange. Another aspect of economic thought before Ibn Khaldun was that of the Scholastics and of the Canonites [Canon lawyers], who proposed placing economics within the framework of laws based on religious and moral perceptions for the good of all human beings. Therefore all economic activities were to be undertaken in accordance with such laws.

"Ibn Khaldun was cognizant of these ideas, including the one relating to religious and moral perceptions. The relationship between moral and religious principles on one hand and good government on the other is effectively expounded in his citation and discussion of Tahir Ibn al-Husayn's (775-822 CE) famous letter to his son 'Abdallah, who ruled Khurasan with his descendants until 872 CE. From the rudimentary thoughts of Tahir, he developed a theory of taxation which has affected modern economic thought and even economic policies in the United States and elsewhere".

Abd al-Rahman ibn Khaldun, the well known historian and thinker from Muslim 14th-century North Africa, is considered a forerunner of original theories in social sciences and philosophy of history, as well as the author of original views in economics, prefiguring modern contributions. In the following detailed and documented article, Muhammad Hozien outlines the bio-bibliography of Ibn Khaldun and presents insights into his theories, especially by comparing his analysis with that of Thucydides, and by characterizing Ibn Khaldun's view on science and philosophy.

The 14th-century historiographer and historian Abu Zayd ‘Abd al-Rahman ibn Khaldun, a brilliant scholar and thinker, is now viewed as a founder of modern historiography, sociology and economics. Living in one of humankind's most turbulent centuries, he observed at first hand, or participated in, such decisive events as the birth of new states, the disintegration of the Muslim Al-Andalus and the Christian re-conquest, the Hundred Years' War, the expansion of the Ottoman Empire, the decline of Byzantium and the epidemic of the Black Death. Considered by modern critics as the thinker who conceived and created a philosophy of history that was undoubtedly one of the greatest works ever created by a man of intelligence, so groundbreaking were his ideas, and so far ahead of his time, that his writings are taken as a lens through which to view not only his own time but the relations between Europe and the Muslim world in our own time as well.

The economic theory of Ibn Khaldun and the rise and fall of nations, Selim Cafer Karatas, Ibn Khaldun on economics, the state theory, specialisation and economic surplus, supply and demand, monetary policy, fixed prices, property rights, Ibn Khaldun's theory of the rise and fall of nations.

In this article on Ibn Khaldun's thought in microeconomics, Cecep Maskanul Hakim analyses several central concepts and theories, from the dynamics of labor to the complex question of demand-supply and prices. Another aspect of the analysis regarding the role of government in the economy is the macroeconomy and monetary theory. Finally, the article addresses and answers some of the recent critiques to Ibn Khaldun's theory.

Ibn Khaldun's theory of taxation has been considered one of his most important contributions to economic thought. In the Muqaddimah, he relates the theory of taxation to government expenditure and argues for low tax rates so that the incentive to work is not killed and taxes are paid happily. According to him, at the beginning of a dynasty, taxation yields a large revenue from small assessment, but at the end of a dynasty, taxation yields a small revenue from large assessment. The effect of taxation on incentives and productivity is so clearly visualized by Ibn Khaldun that he seems to have grasped the concept of optimum taxation. He also analyzed the effect of government expenditure on the economy. He advocates a policy of wise and productive public expenditure. Because of these economic insights, Ibn Khaldun has been considered as the forerunner of modern recommendations that high tax rates shrink the tax base because they reduce the economic activity. This paper aims at an analytical study of this theory by presenting empirical evidence that may support and strengthen the Khaldunian theory of taxation and examines its practicality and relevance today.

The contributions of Ibn Khaldun to the development of economic thought have gone largely unnoticed in the academic realm of Western nations, this despite recent research focusing on Khaldun's magnum opus, The Muqaddimah. In this paper, we examine the similarities between The Muqaddimah and Adam Smith's Wealth of Nations, particularly as they discuss the benefits of a system of specialization and trade and the role of markets and price systems.